With a cost of $80 and no marketing efforts, this non-mainstream pool robot company has achieved over 100 million in revenue | Insight Global
Text | Hu Yiting
Editor | Yuan Silai
Editor's note: As going global increasingly becomes a core strategy for Chinese companies, how to conquer the global market has become an extremely professional topic. In the evolution of globalization, many Chinese brands have stood at the forefront. In view of this, Yingke has launched the "Insight Global" column to explore the cutting - edge directions and opportunities for Chinese brands to go global from the perspective of brand growth and change, providing thinking and inspiration for players in the global market and the industry. This is the 43rd issue of our column - Before entering the pool robot field, Deng Zhuoming had already accumulated rich underwater technology experience from SMIC, iFlytek to military underwater projects. Even when few people were optimistic at that time, he still chose to found "Siaotuo" in 2021 and launched several products within half a year to validate the market. Now, Siaotuo has lowered the price of pool robots with thousand - yuan - level performance to less than $400, and its global revenue has exceeded 100 million yuan. The cost of each Siaotuo product is less than 100 yuan, and its extreme cost control is amazing. In this regard, we had a chat with Deng Zhuoming.
From living rooms, courtyards to swimming pools, Chinese enterprises have closely targeted the home scenarios of overseas consumers.
After the multi - billion - scale markets driven by demands such as air purification, lawn mowing, and snow removal were discovered, the relatively smaller market of pool cleaning has also attracted a group of hardware entrepreneurs.
QYR (QYResearch) data shows that the global sales of the pool cleaning robot market reached $1.018 billion in 2024 and are expected to reach $1.731 billion in 2031.
In fact, the pool cleaning track has existed for more than 40 years, but there are few enterprises specializing in it, and the market concentration is high. Overall, international brands such as Dolphin (Israel), Polaris (Spain), BWT (UK), and Hayward (USA) have dominated the market for years. However, in recent years, domestic manufacturers such as Xingmai Innovation, Yuanding Intelligence, Wangyuan Technology, and Siaotuo have entered the market and obtained large - scale financing.
Siaotuo is an alternative type of startup. It was founded in October 2021 and is headquartered in Shenzhen, selling underwater cleaning robots in the North American and European markets. Compared with the pricing of nearly a thousand or thousands of dollars, Siaotuo has lowered the price to $199 - $399, with a revenue of over 100 million yuan in 2024, ranking fourth in sales on Amazon.
Only in the first quarter of this year, thanks to its cost - performance advantage, Siaotuo's shipment volume has exceeded that of the whole last year, with sales exceeding 50 million yuan, and it has entered a profitable state.
"Currently, the cost of each of our products is less than $90. Even if we lower the price further, we still have room for profit." Deng Zhuoming, the founder of Siaotuo, told Yingke.
In addition, in 2023, Maytronics, the parent company of Dolphin and the world's leading pool robot manufacturer in terms of market share, cooperated with Siaotuo to establish a new brand "Niya". Siaotuo supplies core components such as motors and sensors for it. As of now, the cumulative shipment has exceeded 100,000 units.
The courtyard robot track is already crowded with entrepreneurs, and products cover all price ranges, seemingly leaving no blank opportunities. Siaotuo doesn't rely on marketing. Despite its low prices, it hasn't fallen into the vicious circle of price wars and can still obtain extremely rich profits. This positive cycle is unusual in the current situation where hardware profits are generally meager. We had a chat with Deng Zhuoming, the founder of Siaotuo, hoping to understand the secrets behind this low - key company.
From a Technical Background
Different from his competitors who entered the pool track from the sweeping robot field, Deng Zhuoming has rich underwater technology experience.
After graduating from university, Deng Zhuoming was engaged in chip R & D at SMIC and MediaTek, and then developed robots at iFlytek. In 2016, he began to get involved in unmanned boats and military underwater projects such as anti - submarine and detection.
In addition, Deng Zhuoming is also one of the earliest R & D personnel of electric life - saving rings in China. "We have encountered problems that trouble the industry, such as waterproofing of underwater equipment and battery sealing." Deng Zhuoming told Yingke.
In 2019, Deng Zhuoming began to turn his attention to the consumer market. The home pool cleaning robot, which had long lacked functional innovation but had market potential, caught his eye. Due to the high labor costs in Europe and the United States and the high demand for home pool cleaning, data from the Pool & Hot Tub Alliance shows that there are 10.7 million swimming pools in the United States alone.
At that time, Deng Zhuoming was leading his team to participate in an innovation and entrepreneurship competition. The investors didn't take a fancy to his products, citing that the industry was not hot and there was no data on Amazon.
This was a frustrating setback. Deng Zhuoming was determined and rented a 70 - square - meter office in Bao'an, Shenzhen, with electronic engineers and embedded engineers, and focused on R & D.
The whole process was full of difficulties. Due to the high energy consumption affecting the battery life, the Siaotuo team spent two years transforming the motor transmission system, increasing the service life of the built - in planetary gears from the industry average of 500 hours to 2000 hours, reducing friction and thus energy consumption.
In terms of technology, Deng Zhuoming never hesitates to invest. Even though there are many domestic motor factories, it is difficult for Siaotuo to find satisfactory motors due to the small scale of the pool cleaning robot market.
"No motor factory can do very detailed development for us, such as how to do gear transmission, what kind of lubricating oil has the best effect, and how to reduce costs. They can hardly consider these." Deng Zhuoming introduced.
Therefore, Siaotuo decided to self - develop and self - produce key components such as motors, gearboxes, and sensors. Considering the cost, it independently designed a brushless DC motor (BLDC), fully used domestic components, adopted a minimalist design, platformized the pool robot, and reduced the BOM. At the same time, when designing the robot, Siaotuo had considered using an automated assembly line to increase production capacity with less labor.
Core components of Siaotuo pool robots, source: the enterprise
This directly compressed the production cost, reducing the cost of each pool robot to $80 - $90.
Taking advantage of this, Siaotuo's pool robots, with brushless motors and wall - climbing capabilities, have a price of up to $400. Currently, the prices of pool cleaning robots with the same functions generally range from $500 to several thousand dollars.
In addition, with the cleaning function as the core, Siaotuo's products are smaller in size than similar products while having a larger dirt suction capacity. They can be used in home pools of 18 - 80 square meters, cleaning sand, leaves, and dirt in the pool water, pool walls, and pool bottom.
In 2023, Siaotuo launched three products at once. Now, Siaotuo has launched the SAT 1X and 2X series. The former is priced at $199, and the latter at $399, and they are available on Amazon, TEMU, and eBay. Deng Zhuoming told Yingke: "Now, every product we produce can be sold, and the return rate is only 2 - 3%, far lower than that of our peers."
Cost - Performance Advantage
Deng Zhuoming doesn't like to embellish his words and is sometimes too straightforward and simple.
"I think based on the current achievable cleaning functions, the price of this product should be between $300 and $400. This price is already the limit. I think a higher price is just taking advantage of consumers' ignorance, unless you have real functions to change the current situation and make the cleaning function stronger than it is now." He told Yingke.
He disdains marketing and is puzzled by the money - burning behavior of his peers. Compared with hardware startups with hundreds of employees, Siaotuo's team only has more than 40 people. Siaotuo's office is empty. Many workstations are still vacant after moving to a new location, and there is little decoration, looking like a poorly - managed company.
Deng Zhuoming spends his money on technology R & D. Of course, he still speaks calmly, "The underwater scenario is relatively simple, and there aren't many technical routes." - This is not the kind of story that startup teams like, where they overcome numerous difficulties and finally succeed.
If you want to clean a home pool, the cleaning staff will use cable - connected equipment to suck out the sand and leaves in the pool and scrub the pool. The process is not complicated.
However, to ensure stable operation, pool cleaning robots need to solve the problems of positioning and signal interference. Deng Zhuoming told Yingke that there are no characteristic points underwater. If the inertial navigation + vision solution is adopted, the inertial navigation will completely fail once it encounters an obstacle. The acoustic positioning system is the right solution.
Therefore, Siaotuo chose the USBL acoustic system. Currently, this system is mostly used in industrial scenarios such as offshore oil exploration and salvage, and military fields such as submarine positioning and navigation and underwater weapon system guidance, and a set of the system costs up to hundreds of thousands of yuan.
With his own R & D experience, Deng Zhuoming has made the USBL acoustic system suitable for civilian use and applied it to pool cleaning robots. "The cost of this system for each product is less than 100 yuan." He added.
Siaotuo pool robots in operation, source: the enterprise
Siaotuo's acoustic system undertakes the underwater positioning function. It is understood that the area of ordinary family pools in the United States ranges from 18 to 80 square meters. When the area is different, the underwater echo interference situation will vary. When the pool area is small, the positioning waveform may be reflected several times, making it difficult for the robot to distinguish the accurate position. Siaotuo's products can automatically adjust the gain according to the pool size and adjust parameters such as the strength of the received signal.
In addition to self - production and self - sales, Deng Zhuoming told Yingke that at the end of 2023, Maytronics, the parent company of Dolphin, was attracted by the cost advantage and found Siaotuo to supply products such as motors and sensors and the production line. So far, the cumulative shipment has exceeded 100,000 units.
This year, Siaotuo's products are in short supply, and production capacity has become a key issue. "Now we are in a situation of excessive orders. When new customers come to me, I can't supply them at all. I can only supply the old customers." Deng Zhuoming said, showing the chat records of customers urging him for goods.
This is a kind of trouble that many people would envy. After the production volume increases, Deng Zhuoming still wants to stir up the market. "We will try our best to produce as many products as possible and lower the price further. We will enter all the markets where our peers are present and make the market more competitive."